The creator monetization platform Fanhouse announced yesterday that it was acquired by Passes, a similar startup that only launched in beta in December.
“We only hopped on a call maybe 36 hours ago, and then we closed the deal 24 hours ago,” Lucy Guo, the founder of Passes, told TechCrunch.
Guo declined to disclose the terms of the deal, but Fanhouse is a much more established platform. Fanhouse, founded in 2020, raised a $20 million Series A led by Andreessen Horowitz last year, while Passes raised a $9 million seed led by Multicoin Capital, a crypto-focused fund. Passes, still in its beta phase, is only currently working with about 40 creators.
Despite the speediness of the deal, not all of Fanhouse’s founders were sold. Rosie Nguyen, also a creator known as @jasminericegirl, announced her departure from the company, just hours before The Information scooped the news of the deal.
“I made the difficult decision to resign from Fanhouse earlier today,” Nguyen tweeted. “I started the company to help creators, like myself, who needed to provide for themselves & their families. I care deeply about creators and want to help creators in a way that will better align with my values.”
She added that she did not benefit financially from the deal and left the company without severance or an exit package.
The sudden changes at Fanhouse sparked concern among creators. Some people were worried about a tweet of Guo’s in which she stated that Passes was working on technology that could optionally make AI likenesses of creators. These concerns escalated after Twitch streamer Riley Rose pointed out that Passes does not have content guidelines on its website.
“It’s just that [Fanhouse’s] content guidelines are very, very specific,” Guo told TechCrunch. She said that since Fanhouse used Stripe as its payment processor, the company had to be very clear with users about what they can and cannot post. “We do have content guidelines, it’s just more lax.”
Still, there are not currently content guidelines available on Passes’ website. Guo said Passes will be more lenient with what kinds of content it allows, since it is using a different method of payment processing, but she declined to share more details. Aside from telling creators what they can and can’t post, content guidelines are also necessary for protecting users from harassment, hate speech and other unsavory behavior. (Edit: Guo says the guidelines are online here.)
“We have high-risk credit card processing,” Guo said. “So even though we don’t do any nudity on our site, if we were to do it, it’s allowed — the credit card processors are okay with it.”
Passes has a built-in customer relationship management (CRM) system, which Guo says has helped creators better tailor their content toward their highest-paying fans.
“We’ve been stealing creators from every platform, and at bare minimum, have been 2x-ing their income,” Guo told TechCrunch. “It’s annoying competing with platforms for creators, so we could just eliminate one and bring all the creators over seamlessly.”
Nguyen, however, says that income is not the most important factor for creators when choosing to join a new platform.
“It’s not just about the money, it’s about what platform is going to take care of me,” Nguyen told TechCrunch. “Not every platform cares about its creators, and creators want to feel safe and cared for over anything else.”
Creator economy companies are unique, because when two companies merge, they aren’t just combining assets. They’re responsible for the creators — essentially small businesses — who use their platform to make a living, and it can be difficult to transition to a new platform with just a few weeks’ notice. And when startups have so much investor pressure to expand, that growth can come at the expense of creators, whose businesses often scale best for the long term in slow, sustainable ways.
While Guo assured creators that Passes has their best interests at heart, Nguyen was doubtful, hence leaving Fanhouse amid the deal’s closing.
“It can be hard for companies that have taken VC money to align the incentives of their investors with those of their users,” Nguyen told TechCrunch. “That system does not work for many companies, especially creator companies.”
Nguyen added, “A creator platform that’s not founded by a creator will struggle to understand those creators.”
Now, Fanhouse creators must choose whether to keep making content on Passes. Within the next few weeks, opted-in creator and fan accounts will be transferred over to Passes, where they can use the same log-in credentials to access the site. To ease the transition, Passes is offering creators a 95% take rate for the first six months. Then, that percentage will decrease to 90%, the same as Fanhouse’s rate, which remains above industry standards.